Billionaire real estate magnate Barry Sternlicht said his company, Starwood Capital Group, which manages more than $125 billion in assets, is ready to start tokenizing real-world assets, but is unable to move forward due to regulatory barriers in the United States.
“We want to do it right now and we are ready,” Sternlicht said Wednesday at the World Freedom Forum in Palm Beach. “It’s ridiculous that our clients can’t do it in tokens,” he said, referring to real-world asset transactions, such as real estate, using blockchain-based tokens.
Tokenization refers to converting ownership of physical assets, such as real estate or art, into blockchain-based tokens that can be traded. For companies like Starwood, it could offer a new way to raise capital or give investors access to previously illiquid markets.
Putting real estate on the blockchain is not a new idea, and some other companies are already moving forward on a small scale to make the mass market, which still relies heavily on manual processes, more efficient.
One such company is Propy, which last year unveiled $100 million expansion plans to acquire midsize title companies across the United States, with the goal of streamlining industry processes.
In fact, consulting giant Deloitte said in a report last year that $4 trillion of real estate will be tokenized by 2035, compared to less than $0.3 trillion in 2024. If that becomes a reality, it would be a 27% CAGR for tokenized real estate.
“Tokenized real estate could not only pave the way for new markets and products, but also provide real estate organizations with the opportunity to overcome challenges related to operational inefficiency, high administrative costs charged to investors, and limited retail participation,” Deloitte said.
“It’s something fantastic”
Sternlicht also seems to share the view that tokenization can revolutionize the industry by praising the enormous potential of the underlying technology.
“The technology is superior,” he said. “This is the future.
He even went so far as to compare the current state of tokenization to artificial intelligence, saying that it is far behind current AI.
“This is even older in the physical world than AI.” Sternlicht called tokenization “very exciting” and said, “It’s a fantastic thing for the world, the world just has to catch up.”
